CCAR Results Highlight Fed’s Lack of Transparency

The latest comprehensive capital analysis and review (CCAR) results are a perfect example of why there needs to be more transparency in the Federal Reserve’s (Fed) stress testing scenarios and models.

Its proposed stress capital buffer (SCB) is also a positive step in terms of bringing efficiencies to the capital framework. But more transparency needs to be added to the process so that boards of directors can be the ones making informed decisions about returning capital to shareholders.